Market Equilibrium Quiz 6/5/24

What is the definition of Market Equilibrium?

• A market situation where quantity supplied is greater than quantity demanded

• A market situation that occurs at any price and quantity where quantity demanded and quantity supplied are equal

• A market situation where quantity demanded is greater than quantity supplied

• A market situation where price is at its highest point

What happens when there is a surplus in the market?

• Quantity demanded decreases

• Quantity supplied decreases

• Firms lower the price of goods

• Price increases

What is the purpose of a price ceiling?

• To set a maximum price a seller can charge

• To lower the equilibrium price

• To create a surplus in the market

• To establish a minimum price for goods

What happens when there is an increase in demand and no change in supply?

• Equilibrium price decreases & Equilibrium quantity decreases

• Equilibrium price increases & Equilibrium quantity increases

• Equilibrium price increases & Equilibrium quantity decreases

• Equilibrium price remains unchanged & Equilibrium quantity increases

When demand increases and supply decreases, what happens to equilibrium?

• Equilibrium quantity can increase, decrease or remain unchanged

• Equilibrium quantity will always decrease

• Equilibrium will always decrease

• Equilibrium quantity will always increase

What is the purpose of a price floor?

• To create a shortage in the market

• To set a minimum price a seller can be paid

• To raise the equilibrium price

• To establish a maximum price for goods

What happens when there is a decrease in demand and supply?

• Equilibrium quantity will always decrease

• Equilibrium price will remain unchanged

• Equilibrium quantity is indeterminate

• Equilibrium price will decrease

When demand decreases and supply decreases, what happens to equilibrium?

• Equilibrium price will decrease

• Equilibrium price will increase

• Equilibrium price will remain unchanged

• Equilibrium quantity will always decrease

What is the result of imposing a price ceiling?

• Price cannot increase to bring the market back to equilibrium

• Quantity supplied is greater than quantity demanded

• A shortage is created

• A surplus is created

What happens when there is a decrease in supply?

• Equilibrium price decreases & Equilibrium quantity increases

• Equilibrium price increases & Equilibrium quantity decreases

• Equilibrium price increases & Equilibrium quantity increases

• Equilibrium price decreases & Equilibrium quantity decreases